Two SA aviation authorities have concurred that FlySafair is predominantly owned by foreigners. (Photo: Jacques Stander / Gallo Images) Transport Minister Barbara Creecy has refused to intervene in the dispute between FlySafair and South Africa’s aviation authorities after the airline was declared to be in breach of South African aviation licensing laws and regulations for being foreign-owned.
FlySafair had asked Creecy to intervene after the Air Services Licensing Council (ASLC) concurred with another SA aviation authority, the International Air Services Council, that the airline was predominantly owned by foreigners, breaching South African laws and aviation licensing conditions.
An investigation by both councils found that an Ireland-based company, ASL Aviation Holdings, effectively owns 74.86% of FlySafair through an investment holding company. This is in contravention of the Air Services Licensing Act, which requires that holders of aviation licences in South Africa have a minimum of 75% local shareholding.
FlySafair is waiting for the ASLC to announce its sanctions against the airline, which could include its aviation license being cancelled or suspended, effectively grounding flights until its shareholding structure is fixed.
FlySafair believes that such a sanction could have “catastrophic” consequences for SA’s aviation industry because, with a market share of 60%, South Africa depends on the airline for air travel.
On Thursday, 9 January, FlySafair asked Creecy for an exemption from complying with some provisions of the Air Services Licensing Act. The ASLC falls under the Department of Transport.
In a statement released on Thursday, the department said Creecy had declared FlySafair’s exemption request to be “premature”, effectively rejecting it. In other words, Creecy does not want to make an exemption to benefit FlySafair while the council is yet to issue a sanction against the airline for breaching aviation laws and regulations.
“This, therefore, means that due processes should be followed and concluded. The council should eventually pronounce on its final determination. Safair can thereafter exercise its right to appeal if it feels aggrieved by the final decision of the council,” said the department, adding that Creecy had sought legal advice before making her decision.
This means the risk of FlySafair having its aviation licence suspended or cancelled remains. The council could impose less draconian sanctions, including slapping FlySafair with fines or penalties, or giving the airline more grace (no sanctions) and time to alter its shareholding structure by possibly selling shares in the company to South Africans.
Kirby Gordon, FlySafair’s chief marketing officer, told Daily Maverick that the airline acknowledged Creecy’s decision. “We await further advice from the relevant parties,” said Gordon.
The next few days will be crucial for FlySafair as it is set to meet officials of the International Air Services Council (IASC) about the appropriate sanctions against the airline.
The IASC hasn’t been able to impose sanctions against FlySafair because the airline secured a court interdict barring the authority from issuing sanctions. FlySafair wanted the IASC to first engage with it and provide reasons before proceeding with punitive actions.
Daily Maverick understands that a hearing on the matter is scheduled for Monday, 20 January. DM